Review & Outlook

Bursa Malaysia shares were broadly lower on Monday, save for banking stocks which continued to attract foreign fund purchases, as weak US jobs data sparked concerns over a sharp slowdown in the US economy. The FBM KLCI slid 1.63 points to close at 1,651.49, off an early low of 1,642.31 and high of 1,659.11, as losers swarmed gainers 738 to 333 on total turnover of 3.38bn shares worth RM3.85bn.

While the broader market continues to drift lower amid worries over the weaker economy in China and the US, sustained foreign fund buying interest in key banking stocks should cushion downside for the blue-chip index. Immediate index support remains at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports. Key resistance will be the recent high of 1,684, then 1,695, the Dec 2020 high, followed by the 123.6%FP (1,702) and 138.2%FP (1,741) of the 1,369 low to the 1,638 high.

Maybank need to climb above the 161.8%FP (RM11.07) to fuel upside momentum towards the 176.4%FP (RM11.37) and 200%FP (RM11.86) prior to profit-taking pause, while the rising 50-day ma (RM10.30) provides good uptrend support. RHB Bank will need breakout confirmation above the 29/8/24 high (RM6.28) to enhance upside potential towards RM6.40 and 123.6%FP (RM6.60) ahead, with retracement support from the 76.4%FR (RM5.96) capping downside.

News Bites

• Tenaga Nasional Bhd or TNB has obtained an interim stay from the High Court over it having to pay RM1.4bn in additional tax to the Inland Revenue Board.

• Public Bank Bhd has teamed up with Credit Guarantee Corp Malaysia Bhd to provide RM1bn in financing for small and medium enterprises in the country.

• Kelington Group Bhd has secured new contracts totalling RM413mn over the past two months, bringing its total value of contracts secured year-to-date to RM977mn.

• Binastra Corp Bhd has secured a RM574.4mn contract from Exsim Jalil Link Sdn Bhd to design, construct, test and commission the main building works for Phase 2 of a proposed data centre development in Bukit Jalil, Kuala Lumpur.

• Infrastructure and engineering solutions provider Jati Tinggi Group Bhd said it has bagged two contracts worth RM36.4mn for the installation of underground cables.

• Eversendai Corp Bhd won new contracts worth RM1.1bn in India, Singapore and Saudi Arabia, bringing its order book to a new record high of RM6.7bn. On a separate note, the group has received full debt settlement in relation to one of its oil and gas lift boat deliveries (Vahana Aryan) to the private vehicle of executive chairman and group managing director Tan Sri AK Nathan.

• Gadang Holdings Bhd said a sum of RM9.8mn allegedly owed by its units for work done related to the Johor Bahru-Singapore Rapid Transit System Link project are idling costs that are not payable.

• Plastic pipes and fittings maker Resintech Bhd has secured a joint venture partner and a tenant for a proposed hostel development in Kuala Langat, Selangor, with an estimated gross development value of RM34.1mn.

• Sales of Malaysia's wholesale and retail trade rose 6.7% YoY to RM149bn in July 2024, according to the Department of Statistics Malaysia.

• The size of Malaysia's labour force in July 2024 went up further by recording an increase of 0.1% to 17.2mn persons from 17.17mn persons in June, while the labour force participation rate was unchanged at 70.4%, according to Labour Force Statistics released on Monday.

• Malaysia's property transaction value soared to RM105.65bn in the first half of 2024, marking a 23.8% YoY increase - the highest in five years - according to the National Property Information Centre.

• China's consumer inflation accelerated 0.6% YoY in August to the fastest pace in half a year, but the uptick was due more to higher food costs from weather disruptions than a recovery in domestic demand as producer price deflation worsened.

• Wholesale inventories in the U.S. increased at a slightly less-thanexpected 0.2% in the month of July, according to a report released by the Commerce Department on Monday.

• The Euro area's investor confidence index fell to -15.4 in September as the single currency bloc remains on the brink of recession with the political and economic chaos in Germany weighing heavily on the entire region.

• The UK labour market conditions softened in August as permanent job placements declined sharply amid reduced demand for new staff and falling pay growth, a report compiled by S&P Global showed Monday.

Source: TA Research - 10 Sept 2024